On April 3, three Canadian Crypto Exchanges — WonderFi (WNDR), Coinsquare, and CoinSmart – declared their intent to unite, which will result in the creation of the largest regulated cryptocurrency trading platform in the nation.
Executives from both exchanges have stated that the merger will help them operate more efficiently while also providing a new competitive advantage in terms of company expansion.
These three companies have a total user base of 1.65 million people and shall have more than 600 million dollars worth of assets under custody.
The announcement comes when cryptocurrency exchanges face increasing regulatory scrutiny due to the fallout that occurred with the FTX in November 2022.
Dean Skurka, president and interim CEO of WonderFi, stated that the combination will give a “road to profitability” despite the increased regulatory environment that is now present. In addition (1), he stated the following in a tv interview with Bloomberg:
“If regulatory costs continue to rise, I believe that this will inevitably lead to possibilities for consolidation and acquisition, just as we have seen today. Without a doubt, now that the two businesses have been merged into one, we feel the increased size will alleviate many of those worries, and there will be a distinct road to profitability.”
As a result of the transaction, WondeFi will distribute approximately 269,727,080 common shares to the owners of Coinsquare and approximately 119,181,733 common shares to the shareholders of CoinSmart.
WonderFi stockholders will own 38 percent of the combined company after the two companies are merged into one.
Similarly, shareholders of Coinsquare would possess 43 percent of the combined firm, while owners of CoinSmart will own 19 percent of the combined entity.
Kevin O’Leary, known for his participation in the television show SharkTank, is also manipulating earnings in WonderFi.
According to what he said, the coming together of these three cryptocurrency exchanges in Canada will serve as an example for the rest of the world regarding how cryptocurrency should be regulated. O’Leary continued, saying, “If you can’t play ball with regulators, you will not exist. Period.” Canada will serve as an illustrative model for how things will progress in every area.
More Strict Cryptocurrency Rules in Canada
In the same vein as their counterparts in the United States, Canadian officials have been increasing the pressure they put on the cryptocurrency industry.
Coinsquare made history in October 2022 by becoming the first cryptocurrency exchange in Canada to register with the Investment Industry Regulatory Organization (IIROC).
Therefore, the regulated cryptocurrency trading business of the newly combined corporation will be “consolidated beneath Coinsquare’s investing dealer registrant,” and Coinsquare Capital Markets Ltd. will become a new member of SRO.
The Chief Executive Officer of Coinsquare, Martin Piszel, stated, “Regulation is now arriving first, and that is a competitive advantage.”
According to Justin Hartzman, founder and CEO of CoinSmart, combining the two businesses would provide users with a “controlled, safe environment” for their financial assets. He also mentioned that the approach to the cryptocurrency trading platform that puts regulation first would give clients a sense of assurance.